Arla has announced an increase of 0.38p/l from 1 March, which brings its standard liquid milk price to 27.45p/l, while its manufacturing (cheese) price increases to 28.55p/l. Farmers supplying Tesco through Arla will receive a standard liquid price of 28.87p/l with an organic milk price of 41.1p/l.

First Milk increased its February prices by 0.85p/l to 0.95p/l, depending on the supply region. In Scotland, First Milk is paying 26.09p/l, while in the Lake District it is paying 27.11p/l for liquid milk and 28.04p/l on manufacturing milk.

In Wales, First Milk is paying 28.23p/l for liquid milk, while in the English midlands, it is paying 26.05p/l. Müller looks like it will remain unchanged in its milk price for March, paying 26.69p/l.

Spot prices for milk in Britain have now steadied around the 26p/l mark as monthly supplies are on the increase

Müller offers new contract terms

Müller, the dairy processing giant, has issued new contract terms to its 1,900 suppliers in Britain.

Producers have until 21 April to sign the supply agreement, which is set to start on 1 May.

The new agreement comes after major consultations with producer groups.

With farmers forecasting their monthly supply, there were issues over tolerance levels if a producer supplied more, or less, than they originally forecast.

There are no penalties for supply volumes within 7.5% of the forecast volume, with lower penalties from 7.5% to 20% of forecasts.

Butterfat penalties have also been reduced from 0.035p/l to 0.025p/l for every 0.01% below the base line of 4%. Producers are rewarded with a 0.025p/l bonus for every 0.01% above the 4% base.